Giving reasons categorise the following into intermediate products and final products:
(i) Furniture purchased by a school
(ii) Chalks, dusters purchased by a school.

(i) Furniture purchased by a school is a final product because it is purchased for investment.

(ii) Chalks purchased by a school is an intermediate product as it is meant to be used completely in the same year.

Significance of distinction lies in the fact that national income includes value of only final goods (and not of intermediate goods).

Final expenditure and intermediate expenditure — The distinction between the two depends on nature of the demand. Final expenditure is the expenditure made on purchase of goods and services for final consumption and investment. On the other hand, intermediate expenditure is the expenditure made by a firm on purchase of goods and services from other firms to be used as raw material or for resale in the same year.